I going to make a greatest artwork as I can, by my head, my hand and by my mind.Affirm Holdings (NASDAQ:AFRM) skyrocketed on Thursday as investors digested the fintech’s strong quarterly earnings that were released after market close on Wednesday. Affirm Holdings, with its focus on buy now, pay later products, saw its sales surge 48% YoY amid robust demand for credit card alternatives. The fintech is growing its buy now, pay later platform at scale and easily surpassed Wall Street’s profit targets. I th ...

Shares of Affirm Holdings, Inc. (AFRM) surged 31.9% yesterday thanks to better-than-expected fourth-quarter fiscal 2024 results and optimistic guidance, including a goal to achieve operating income profitability on a GAAP basis in the fourth quarter of fiscal 2025. Its buy now, pay later (BNPL) services gained popularity during high inflation, driving its growth.AFRM’s Key Q4 DriversIts fourth-quarter fiscal 2024 results revealed a 19% year-over-year increase in active merchants to 303,000. Strength in gene ...

Core Insights - Affirm reported strong earnings, leading to a 30% increase in stock price, highlighting the effectiveness of its business model and user profile [2] - The misconception that Affirm primarily serves financially insecure consumers is debunked, as data shows that middle-income consumers are more likely to carry credit card debt [3][4] - Affirm's partnerships with major platforms like Shopify have attracted higher-income users, indicating a shift in its customer base towards mainstream credit card users [11][12] User Profile and Credit Card Debt - Credit card liabilities account for 6% of total household debt in the U.S., with outstanding balances reaching $1.14 trillion as of Q1 2024 [4] - Middle-income consumers, rather than low-income consumers, predominantly carry credit card debt, with 40-60% of them affected [4][6] - The belief that consumers with credit card debt cannot repay it is challenged by data showing that debt balances typically account for 40-60% of income, suggesting temporary debt for larger purchases [6][8] Affirm's Growth and Performance - Affirm's Gross Merchandise Volume (GMV) has shown growth in newer cohorts post-FY2020, contrasting with stagnant spending from earlier users [9][11] - The company has outperformed large banks in terms of credit card delinquency rates, particularly in the 60- and 90-day categories, indicating superior risk management [13] - Affirm's return on equity (ROE) stands at 51%, significantly higher than Bank of America's 12%, suggesting a more profitable model if operating efficiency is maintained [16] Financial Metrics and Operational Efficiency - Affirm's operating expenses have decreased, with technology, sales, and marketing costs down by 19%, 10%, and 10% respectively compared to 2023, while revenues grew by 46% [19][22] - The company is expected to achieve GAAP profitability by the end of FY2025, supported by partnerships with major payment platforms [22][23] - Affirm's transaction margin and revenue per employee are competitive, with a market capitalization under $10 billion, indicating potential for premium valuation if margins improve [29][31] Competitive Landscape - Affirm's transaction margins and take rates are among the highest in the BNPL sector, positioning it favorably against competitors like PayPal and Klarna [26][27] - The company is expected to capture a larger share of the credit card market, particularly among consumers with credit card interest debt, as it moves towards mainstream acceptance [23][31] - Affirm's distinctive business strategy and capital efficiency may pose a threat to established competitors in the financial services industry [32]

Key TakeawaysAffirm reported quarterly results that beat analysts' expectations for revenue and net income.CEO Max Levchin expects the company to be profitable by the fourth quarter of fiscal 2025.The company's first quarter revenue guidance range exceeded the analyst consensus. Affirm Holdings (AFRM) shares are surging after the buy now, pay later (BNPL) fintech company posted better-than-expected fiscal fourth-quarter results and strong guidance after the bell Wednesday. Revenue jumped 48% year-over-year ...

Core Insights - Affirm Holdings, Inc. (AFRM) reported better-than-expected fourth-quarter fiscal 2024 results, driven by improved servicing income, card network revenues, and higher transaction volumes, despite rising expenses primarily due to increased provisions for credit losses [1][2][3] Financial Performance - The fiscal fourth-quarter loss was 14 cents per share, significantly better than the Zacks Consensus Estimate of a loss of 45 cents and the prior year's loss of 69 cents [1] - Total net revenues reached $659.2 million, exceeding management's expectations of $585-$605 million, and representing a 47.8% year-over-year increase [1][2] - Active merchants increased by 19% year over year to 303,000, with Gross Merchandise Volume (GMV) climbing 31% year over year to $7.2 billion, surpassing management's expectations [2] - Total transactions rose 42% year over year to 24.7 million, driven by a significant increase in repeat customer transactions [2] Revenue Breakdown - Servicing income improved by 18.9% year over year to $27.6 million, exceeding the consensus mark of $25.4 million [2] - Interest income surged 57% year over year to $337.6 million, higher than the consensus estimate of $325.7 million [2] - Merchant network revenues totaled $181 million, growing 28% year over year, and card network revenues rose 26.2% year over year to $43 million [3] Expense Analysis - Total operating expenses increased by 6.2% year over year to $732.6 million, primarily due to higher loan purchase commitments and funding costs [3] - Provision for credit losses escalated by 24.5% to $117.6 million, while technology and data analytics, sales and marketing, and general and administrative expenses decreased year over year [3] Adjusted Operating Metrics - Affirm generated an adjusted operating income of $150 million, significantly up from $15 million in the prior-year quarter, with an adjusted operating margin of 23% [4] - The net loss of $45.1 million was narrower than the prior year's loss of $206 million [4] Financial Position - As of June 30, 2024, cash and cash equivalents stood at $1 billion, a 13.6% increase from the fiscal 2023-end figure, while total assets rose 16.7% to $9.5 billion [5] - Funding debt amounted to $1.84 billion, up 4.1% from the previous year, and total stockholders' equity grew by 7.8% to $2.7 billion [5] Future Guidance - For Q1 fiscal 2025, Affirm forecasts GMV in the range of $7.1-$7.4 billion and revenues between $640-$670 million [6] - Management anticipates a GMV of over $33.5 billion for fiscal 2025, with revenues projected to expand as a percentage of GMV [7]

Affirm shares soared 34% on Thursday and were on pace for their best day in almost three years, after the provider of buy now, pay later loans beat on the top and bottom lines in its earnings report. If the rally holds, it will be the third-biggest rally for the stock since the company's IPO in January 2021. The stock was trading at $42.17 as of early afternoon.Following the market close on Wednesday, Affirm said revenue in the fiscal fourth quarter climbed 48% from a year earlier to $659 million, and that ...

Affirm's recent quarterly report arrived with some fantastic surprises.Affirm Holdings (AFRM 30.46%) stock is skyrocketing in Thursday's trading. The buy now, pay later specialist's share price was up 33.9% as of 11 a.m. ET, according to data from S&P Global Market Intelligence.After the market closed yesterday, Affirm published results for the fourth quarter of its last fiscal year (which ended June 30). The company delivered sales and earnings for fiscal Q4 that beat Wall Street's targets, and the company ...

Ratana21/iStock via Getty ImagesAffirm Holdings, Inc. (NASDAQ:AFRM) has always been an intriguing fintech due to the well known CEO in a crowded space. The biggest issue has always been paying the correct price for the opportunity in the buy now, pay later space. My investment thesis is more Neutral on the stock after the big jump in after-hours trading on excitement over earnings. Source: Seeking Alpha Impressive Growth Affirm has really turned the business around with the fintech reporting a strong ...

On Wall Street, “strength begets strength.” Despite the recent market correction and the volatility caused by the “Yen Carry Trade” unwind, the fintech and payments group has exhibited stellar relative strength recently. Over the past three months, PayPal ((PYPL) ), Affirm ((AFRM) ), and Upstart ((UPST) have each outperformed the S&P 500 Index ETF ((SPY) dramatically, gaining 15.5%, 26.4%, and 83.5% (compared to the SPY’s 6.7%).Image Source: Zacks Investment ResearchThe “buy now, pay later” (BNPL) segment o ...

Affirm TodayAFRMAffirm$40.05 +8.47 (+26.82%) 52-Week Range$15.97▼$52.48Price Target$32.97Add to WatchlistAffirm NASDAQ: AFRM has seen wild fluctuations in its stock price over the past three years. Shares peaked at nearly $169 in November 2021 but are down 80% from that level today. However, shares are up 82% in the past 52 weeks.Investors might recognize the fintech company as a payment option allowed when making online purchases. Affirm often pops up when checking out online to pay off a purchase in insta ...